EconomyxAI · Sector Watch April 2011Released April 13, 2011 |
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Conditions index +0.37 avg of 11 sectors, −2 to +2 |
| Outlook index +0.51 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 4/11 sectors improving |
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This release in brief The read | ■ | Released April 13, 2011, with information collected before April 4, 2011. | | ■ | Activity continued to improve with widespread gains across sectors; Kansas City described growth as solid, while many districts called it moderate. | | ■ | Manufacturing led, rising in all twelve districts with strong auto output in Richmond and Chicago, though Japan's disaster raised supply-chain worries. | | ■ | Consumer spending picked up modestly except in Richmond and Boston; housing was flat or weakening while seven districts saw slight commercial real estate gains. | | ■ | Commodity and energy costs put increasing pressure on prices, manufacturers passed them through more easily than retailers or builders, and wage pressure stayed subdued. |
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Sector prospects Where the 3–12 month view points Strongest prospects Energy
XLE
▲ Turning up | +0.78 |
| Industrials
XLI
▲ Turning up | +0.62 |
| Materials
XLB
▶ Steady | +0.51 |
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| Weakest prospects Real Estate
XLRE
▶ Steady | −0.06 |
| Financials
XLF
▼ Turning down | +0.06 |
| Health Care
XLV
▼ Turning down | +0.11 |
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All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
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| 1 | Energy
XLE | | +0.78 | Favorable | +1.28 | +0.78 | ▲ +0.28 | | 2 | Industrials
XLI | | +0.62 | Favorable | +1.33 | +0.63 | ▲ +0.20 | | 3 | Materials
XLB | | +0.51 | Favorable | +0.59 | +0.50 | ▶ +0.23 | | 4 | Consumer Discretionary
XLY | | +0.34 | Leaning Favorable | +0.68 | +0.69 | ▶ −0.21 | | 5 | Information Technology
XLK | | +0.24 | Leaning Favorable | +0.46 | +0.36 | ▼ −0.20 | | 6 | Communication Services
XLC | | +0.21 | Leaning Favorable | +0.02 | +0.50 | ▶ −0.03 | | 7 | Utilities
XLU | | +0.19 | Leaning Favorable | +0.00 | +0.50 | ▶ +0.00 | | 8 | Consumer Staples
XLP | | +0.19 | Leaning Favorable | +0.31 | +0.50 | ▶ −0.04 | | 9 | Health Care
XLV | | +0.11 | Neutral | −0.11 | +0.50 | ▼ −0.23 | | 10 | Financials
XLF | | +0.06 | Neutral | +0.01 | +0.52 | ▼ −0.47 | | 11 | Real Estate
XLRE | | −0.06 | Neutral | −0.45 | +0.12 | ▶ +0.26 |
Prospect Score blends current conditions, district outlooks, momentum, a sector-specific macro tilt and margins. Now = weighted current conditions; Outlook = n/a when too few districts gave one; Mom. = change vs the average of the two prior releases. |
National Summary, scored −2 to +2 Macro backdrop | Overall Economic Activity | | +0.75 |
Activity continued to improve; gains widespread across sectors; Kansas City solid. | Labor markets generally stronger; skilled-worker shortages in several districts. | | Inflation Pressure (higher = headwind) | | +1.00 |
Higher commodity and energy costs widely putting increasing pressure on prices. | Loan demand unchanged or up slightly; standards unchanged or tighter; New York, St. Louis, Kansas City weaker. | Near-term outlooks mostly upbeat, but uncertainty high after Japan and Middle East events. |
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Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
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| Information TechnologyXLK | +1 | · | · | · | · | · | · | · | · | +1 | −1 | +1 | | Health CareXLV | +1 | · | · | +1 | · | · | · | −1 | · | · | · | −1 | | FinancialsXLF | · | −1 | · | +1 | +1 | · | +1 | −1 | · | −1 | · | +1 | | Consumer DiscretionaryXLY | · | +2 | +1 | +1 | −1 | +1 | +1 | +1 | +1 | +1 | +1 | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | +1 | · | · | · | | IndustrialsXLI | +1 | +1 | +1 | +1 | +2 | +2 | +2 | · | +1 | +2 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | +1 | +1 | | EnergyXLE | · | · | · | · | · | · | · | +1 | +1 | +1 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | −1 | · | · | +1 | · | −1 | −1 | · | · | · | −1 | | MaterialsXLB | · | · | · | +1 | · | · | +1 | · | +1 | · | +1 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials +2 Richmond, Atlanta, Chicago, Kansas City Manufacturing expanded at a solid or rapid pace; auto output up substantially. Why it matters: Four +2 reads in Industrials, including Chicago's 14% weight. | Energy +2 Dallas Energy activity strong; refining picked up; petrochemical demand strong. Why it matters: Dallas carries 45% of Energy weight. | Consumer Discretionary +2 New York Robust retail sales and exceptionally strong new vehicle sales. Why it matters: Largest Discretionary read. | Industrials +1 broad−based All districts All twelve districts reported manufacturing increased. Why it matters: Breadth keeps Industrials on top. | Consumer Discretionary −1 Richmond Retail sales remained anemic; big-ticket sales weakened. Why it matters: Only negative Discretionary district. | Information Technology −1 Dallas High-tech shipments to Japanese factories declined. Why it matters: Dallas holds 10% of IT weight. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Expanded in most sectors; retail mixed. |
| New York Growing +1.0 Outlook ▲ Strengthened further. |
| Philadelphia Growing +0.5 Outlook ▲ Improved overall. |
| Cleveland Growing +0.5 Outlook ▲ Continued to expand at a modest pace. |
| Richmond Growing +0.5 Outlook ▲ Generally improved. |
| Atlanta Growing +0.5 Outlook ▲ Advanced modestly. |
| Chicago Growing +0.5 Outlook ▲ Continued to increase. |
| St. Louis Growing +0.5 Outlook ▲ Expanded at a modest pace. |
| Minneapolis Growing +1.0 Outlook ▲ Expanded moderately. |
| Kansas City Growing +1.0 Outlook ▲ Expanded solidly. |
| Dallas Growing +1.0 Outlook ▲ Grew at a moderate pace. |
| San Francisco Growing +1.0 Outlook ▲ Expanded moderately. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — New York's +2 lifts the weighted score while Richmond's -1 and San Francisco's neutral read hold it back.
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| | Information Technology — Dallas -1 (10% weight) offsets part of San Francisco's +1.
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How to read this. Each Fed district’s report is scored −2 (strong contraction) to +2 (strong expansion) for each GICS sector, then weighted by the district’s share of that sector’s activity. The Prospect Score blends current conditions (25%), district outlooks (35%), momentum (20%), a sector-specific macro tilt (10%) and margin pressure (10%). The Beige Book describes regional activity, not earnings or valuations. Weights and sensitivities are illustrative. This newsletter is for information only and is not investment advice. Source: Federal Reserve Beige Book · Scored by EconomyxAI |